Use the following transactions to complete the first month of the Billy Bob's Daycare. Jan. 1...
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Use the following transactions to complete the first month of the Billy Bob's Daycare. Jan. 1 Billy Bob Caroll organized the daycare as a corporation and invested his savings of $42,000 cash in the business in return for capital stock. Signed a contract to lease a building for $2,100 per month. Billy paid the first six months in advance. Paid cash for a one-year insurance policy $1,500. Purchased supplies on account for $215. 1 1 1 2 Paid cash for playground equipment and furniture. The playground equipment cost $5,000 and the furniture cost $1,300. 3 Purchased groceries on account for $300 (recorded as food expense). Paid employees' cash of $2,000. 14 17 Provided daycare services for 30 kids at $300/kid from January 3rd through today. Collected cash for 28 kids and the parent of the 2 of the kids agreed to pay in the future. Note: Amounts to be received in the future for services already provided are called account receivable. 21 Collected cash in advance of $900 for daycare services that will not be provided until next month (February). Note: Revenue recognition principle states that revenue is recorded when service is provided. No service will be provided until February so service is owed. Collected cash of $600 from the parent that agreed to pay in the future on January 17th Note: Revenue was already recorded on January 17th Paid employees' cash of $2,000 and Billy a cash salary of $3,500 for time worked at the daycare. 22 28 31 Provided daycare services for 30 kids at $300/kid from January 17th through today. Collected cash for all 30 kids. 31 Paid Billy a dividend of $200. ADJUSTMENT INFORMATION at January 31, 20XX 1. Assets have the following residual values and useful lives: Residual Value Furniture Playground Equipment $100 $200 Useful Life 5 10 2. The employees had worked 24 hours at $10/hour since last being paid on January 28th. Remember that the cash account is NEVER used in the adjustment process. 3. A physical count of supplies revealed that $40 remains in supplies. 4. Utility bills that have been received but not paid totaled $220. 5. Don't forget to record the adjusting entries for one month of expired insurance and rent. Use the following transactions to complete the first month of the Billy Bob's Daycare. Jan. 1 Billy Bob Caroll organized the daycare as a corporation and invested his savings of $42,000 cash in the business in return for capital stock. Signed a contract to lease a building for $2,100 per month. Billy paid the first six months in advance. Paid cash for a one-year insurance policy $1,500. Purchased supplies on account for $215. 1 1 1 2 Paid cash for playground equipment and furniture. The playground equipment cost $5,000 and the furniture cost $1,300. 3 Purchased groceries on account for $300 (recorded as food expense). Paid employees' cash of $2,000. 14 17 Provided daycare services for 30 kids at $300/kid from January 3rd through today. Collected cash for 28 kids and the parent of the 2 of the kids agreed to pay in the future. Note: Amounts to be received in the future for services already provided are called account receivable. 21 Collected cash in advance of $900 for daycare services that will not be provided until next month (February). Note: Revenue recognition principle states that revenue is recorded when service is provided. No service will be provided until February so service is owed. Collected cash of $600 from the parent that agreed to pay in the future on January 17th Note: Revenue was already recorded on January 17th Paid employees' cash of $2,000 and Billy a cash salary of $3,500 for time worked at the daycare. 22 28 31 Provided daycare services for 30 kids at $300/kid from January 17th through today. Collected cash for all 30 kids. 31 Paid Billy a dividend of $200. ADJUSTMENT INFORMATION at January 31, 20XX 1. Assets have the following residual values and useful lives: Residual Value Furniture Playground Equipment $100 $200 Useful Life 5 10 2. The employees had worked 24 hours at $10/hour since last being paid on January 28th. Remember that the cash account is NEVER used in the adjustment process. 3. A physical count of supplies revealed that $40 remains in supplies. 4. Utility bills that have been received but not paid totaled $220. 5. Don't forget to record the adjusting entries for one month of expired insurance and rent.
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To complete the first month of Billy Bobs Daycare we need to record the transactions and make the necessary adjusting entries at the end of January Le... View the full answer
Related Book For
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st Edition
Authors: David M. Maloney, William H. Hoffman, Jr., William A. Raabe, James C. Young
Posted Date:
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